Two out of Three P2P Companies Face Closure Risk: "What About My Investment?" (Comprehensive)

[Asia Economy Reporters Kim Hyo-jin, Kim Min-young] In the first comprehensive survey of loan receivables conducted by financial authorities to distinguish the quality of online-linked investment finance (P2P) companies, only about 3 out of 10 targeted companies submitted audit reports with an 'unqualified' opinion. It is anticipated that 2 out of 3 P2P companies may face 'mass closures.' There are concerns about principal losses for investors who have already invested.

According to the Financial Services Commission and the Financial Supervisory Service on the 2nd, out of 237 P2P companies, only 79 companies, about 33%, submitted audit reports on loan receivables from accounting firms to the financial authorities. The submission deadline was the 26th of last month. Among these, 78 received unqualified opinions, while one company received a 'disclaimer of opinion.' Among companies that did not submit reports, 26 responded with 'no business performance,' 12 with 'submission difficulties,' and 7 requested 'extension of submission deadline.'

Among the 113 companies that did not respond, 8 reported closures in July or August, and 105 did not respond, according to the financial authorities.

This means that the business status of more than two-thirds, 159 companies, is unclear. The industry and financial authorities viewed this audit report submission as a preliminary step and expected most companies to meet the requirements and submit the reports. The Financial Supervisory Service was optimistic that more than half would be able to submit. A Financial Supervisory Service official said last month, "Although some companies say the time is tight, since the focus is only on loan receivables such as rollovers or false listings, it will be completed quickly." Because it is a basic report verifying whether the book receivables match the actual holdings, most companies were expected to be able to submit.

Nevertheless, the fact that only 78 companies submitted audit reports with unqualified opinions has left the industry and authorities perplexed. For now, the financial authorities have requested companies that did not submit or respond to submit audit reports by the 10th, giving them a final chance.

The financial authorities plan to verify the business status of companies with 'qualified opinions,' 'disclaimer of opinion,' or those that ultimately fail to submit audit reports, encouraging them to return their P2P-linked lending business registrations. If necessary, on-site inspections will be conducted, and actions such as cancellation of registration under the Lending Business Act will be taken. Some pessimistic views suggest that among the 78 companies that submitted unqualified reports, only a handful may be registered and operating as online investment-linked businesses.

The problem lies with the invested funds. Although P2P companies are supposed to return investment funds to investors even if they close, there are concerns that this will be practically impossible. According to the P2P financial statistics company 'Midrate,' as of this date, the outstanding loan balance amounts to 2.3212 trillion KRW.

This content was produced with the assistance of AI translation services.